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	<title>Discussion on: Justifying IT expenditures: Outsourcing isn’t always the answer</title>
	<link>http://itknowledgeexchange.techtarget.com/cio/justifying-it-expenditures-outsourcing-isn%e2%80%99t-always-the-answer/</link>
	<description>A proportional mix of news and wit for the midmarket</description>
	<pubDate>Thu, 24 Jul 2008 19:02:53 +0000</pubDate>
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		<title>By: AlexFrench</title>
		<link>http://itknowledgeexchange.techtarget.com/cio/justifying-it-expenditures-outsourcing-isn%e2%80%99t-always-the-answer/#comment-12</link>
		<author>AlexFrench</author>
		<pubDate>Thu, 24 Apr 2008 07:49:27 +0000</pubDate>
		<guid>http://itknowledgeexchange.techtarget.com/cio/justifying-it-expenditures-outsourcing-isn%e2%80%99t-always-the-answer/#comment-12</guid>
		<description>[B]Outsourcing is admitting you can't manage your own IT Infrastructure, nothing more. [/B]

Then, not only are you admitting failure, you are allowing another company to make 10% - 30% profit from your inability to manage your infrastructure.

[B][I]Ask yourself this question: If you couldn't manage your IT infrastructure within your budget, how is a third party going to do it when you (a) pay them less than your budget and (b) take up to 30% as profit.
[/I][/B]
[B]Simple - they won't[/B]

Whilst there may be fewer dollars going out the door as part of contractual agreements on day 1, the outsource company WILL make a profit, and they will do this at the expense of your business.

Lost productivity of your workers due to downtime, delays on projects, money spent with governance 'negotiating' every single line of the contract, ridiculous charges for anything outside of the contract, increased timelines negotiating even the simplest projects, renegotiations when the project scopes change in the slightest, requoting and resubmitting any changes for financial approval before they continue.

Then, let's put the customer-facing staff out in a country where english is a second language - and make them talk technical to people who are frustrated they can't get their presentation done on time. Let's pass the problem tickets around teams so no-one takes responsibility, the outsource teams being measured on the time they work on the ticket - they meet their internal SLAs but the problem isn't resolved. Let's have a 24-round trip time on emails because they don't work the same hours as you. Frustrated customers but contractually nothing can be done. Lost productivity in an attempt to save money.

No-one gets something for nothing. IT is a service and it costs. Good IT services  costs more, but it enables your business to do business. Outsource and you're history.

Outsource = DISASTER FOR YOUR BUSINESS.</description>
		<content:encoded><![CDATA[<p><b>Outsourcing is admitting you can&#8217;t manage your own IT Infrastructure, nothing more. </b></p>
<p>Then, not only are you admitting failure, you are allowing another company to make 10% - 30% profit from your inability to manage your infrastructure.</p>
<p><b><i>Ask yourself this question: If you couldn&#8217;t manage your IT infrastructure within your budget, how is a third party going to do it when you (a) pay them less than your budget and (b) take up to 30% as profit.<br />
</i></b><br />
<b>Simple - they won&#8217;t</b></p>
<p>Whilst there may be fewer dollars going out the door as part of contractual agreements on day 1, the outsource company WILL make a profit, and they will do this at the expense of your business.</p>
<p>Lost productivity of your workers due to downtime, delays on projects, money spent with governance &#8216;negotiating&#8217; every single line of the contract, ridiculous charges for anything outside of the contract, increased timelines negotiating even the simplest projects, renegotiations when the project scopes change in the slightest, requoting and resubmitting any changes for financial approval before they continue.</p>
<p>Then, let&#8217;s put the customer-facing staff out in a country where english is a second language - and make them talk technical to people who are frustrated they can&#8217;t get their presentation done on time. Let&#8217;s pass the problem tickets around teams so no-one takes responsibility, the outsource teams being measured on the time they work on the ticket - they meet their internal SLAs but the problem isn&#8217;t resolved. Let&#8217;s have a 24-round trip time on emails because they don&#8217;t work the same hours as you. Frustrated customers but contractually nothing can be done. Lost productivity in an attempt to save money.</p>
<p>No-one gets something for nothing. IT is a service and it costs. Good IT services  costs more, but it enables your business to do business. Outsource and you&#8217;re history.</p>
<p>Outsource = DISASTER FOR YOUR BUSINESS.</p>
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